Accounting and Technology
In the past, accounting activities were very difficult because people had to use a pen and a book to keep records that were then used in preparing financial statements. This led to the various errors in the financial statements in those days. The activity of preparing financial statements was tedious and required many people because apart from evaluating the records, there was physical counting of the items that were to be included in the statements. This means that several employees were required in order to prepare the statements. This also meant that the financial statements were would never be prepared on a timely basis, and the members of the public had to wait until the statements were ready before they can make their important decisions. The management also found it difficult to make decisions that required up to date information from the financial records. The aim of this paper is to evaluate how technology has changed accounting activities at Wal-Mart. It also recommends what can be done in order to achieve greater benefits from the technology.
The research question that guides this research is: How has technology has changed accounting activities in Wal-Mart? This means that there will be a need to evaluate the technology at the company, and then link its use to the accounting activities at the company. Having evaluated the technology, it will be possible to find out the improvements that can be implemented to achieve greater benefits in the company (Westerman, 2001).
The research is important in various ways. For Wal-Mart, it will be easy to learn how better technology can be used to achieve greater benefits. On the other hand, it will be easy for the other companies to understand how technology can improve their accounting activities.
Findings and DiscussionsWal-Mart has an information system that helps in recording the movement of goods from the warehouses and to the retail shops. When goods are purchased to the warehouse, barcodes are attached to the goods such that recording of the goods is done electronically. When goods in the stores are purchased, the system records that, and this means that any products that are not in enough quantities can be identified (Westerman, 2001). The system submits reports to the relevant department such that information is sent to the warehouse for more supplies. A similar system in the warehouse is in place and ensures that goods are acquired when they are below a certain level.
In the accounting field, the information recorded by the system is important in ensuring that the preparation of the financial statements is prepared. There is no need of having accountants to record the daily transactions because the cashiers complete the records when they produce receipts to the customers during the sale process. The information is updated in the company database on a daily basis, and this means that the financial statements can be prepared any time in the year.
The accountants may need to compare the financial records from the various retail branches and the information from the warehouse records. This can ensure that any potential errors in the records are identified (Gelinas, 2010). The system also provides information that relates to stock that is still at the stores and in the warehouse. This makes it possible to prepare the balance sheet.
The auditors also find their job easy because they can use the system to test whether there are chances of potential errors. Physical checks can also be done to confirm the information in the system.
The benefits for the accosting department are that a few employees can complete the accounting work because the various software available can be used to prepare the financial statements.
Wal-Mart already has a good information system. For the accounting purposes, the company should have a common database that links all information from the various branches real time. The system should also have accounting software that can ensure that it is possible to produce financial statements every time that they want. This means that the system should be able to provide a financial statement, profit, and loss account as well as cash flow statement every minute because the whole system is updated from the various branches every minute. Such a system can improve the accuracy of decision-making activities. Additionally, the company will be able to provide quarterly reports to the members of the public, and this can create more trust by the public.
It is evident that information technology has changed the accounting procedures greatly. Companies should be brave enough to invest in the technology as well as train its employees on their use so that they can benefit from the technology. Using the technology eliminates accounting problems such as fraud and theft and ensures that decision-making processes are correct because the required information is available at the right time. This also requires the commitment of the accounting department in ensuring that the employees have the skills to use the various software that help in producing the financial statements when required. Such a system will be very crucial in ensuring that costs of accounting are reduced, and the accuracy of the statements is enhanced.
Gelinas, U. J., & Dull, R. B. (2010). Accounting information systems. Australia: South-Western/ Cengage Learning.
Westerman, P. (2001). Data Warehousing: Using the Wal-Mart Model. San Francisco, CA: Morgan Kaufmann.
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